Good morning. The adoption of artificial intelligence is in its early stages, and for some companies it can be difficult to extract value from an investment in the technology. But Bank of Nova Scotia is now using AI to improve the way it manages payment collections for its 5 million Canadian credit card customers, and it says it will find more uses for machine learning and other digital tools. CIO Journal's Steven Norton has the story.

Working with Toronto-based startup DeepLearni.ng, Scotiabank developed and launched a tool in December that identifies potentially delinquent or high-risk customers and suggests the best way to approach them about it. Even a small improvement in collections can have a big impact on the bank’s bottom line, said Michael Zerbs, chief technology officer at Scotiabank. The challenge is to figure out the best way to interact with customers who may have simply forgotten to pay versus those less likely to pay at all.

The DeepLearni.ng tool analyzes individual customer behavior, looks for patterns and correlates it with other data pulled from the bank’s enterprise data lake. It then suggests the best time and method, such as email or text message, to reach credit card customers about payments. Before, the bank used regression models to determine when to reach out to customers. Those models were easier to interpret and explain, but limited the number of variables that could be used. Finding non-linear relationships had to be done manually. Unlike those previous models, the machine learning tool can use all information available and handle significant non-linear relationships automatically. To run the tool, Scotiabank is taking advantage of graphics processing units from cloud providers to do calculations more quickly and run multiple models simultaneously.

"There’s a whole breadth of use cases, and we want to have a consistent approach," Mr. Zerbs tells CIO Journal. Its annual technology investment has doubled over recent years to more than $2.6 billion Canadian dollars. It plans to spend C$425 million on digital capabilities in 2017, and about C$1.3 billion over the next three years. (For more on AI, see our Special Report)

Demand for digital tech driving IT sector job growth: Analysis. The U.S. information-technology sector added a net 9,000 new jobs in January, up from 5,100 in December, tech industry trade group CompTIA reports. “Within the IT industry, executives are most bullish on services business,” Tim Herbert, CompTIA’s senior vice president for research and market intelligence, said in a statement. These services “drive the digital transformation now taking place in many organizations, and they’ll continue to define the business of the future,” he said.

Podcast: The NFL's latest game? Data and analytics. On the heels of Sunday's Super Bowl, CIO Journal's Sara Castellanos talks the new data and analytics game being played on the NFL sidelines. One obvious winner: Kraft Analytics Group, a startup born out of efforts by the New England Patriots to sell merchandise to a growing Pats fanbase. Listen.

TECHNOLOGY NEWS

In an image pre-recorded before the Super Bowl, a fleet of Intel Shooting Star drones lighted up the Houston sky in an American Flag formation.

INTEL CORP.

Intel basks in drone afterglow. Intel Corp. scored a public-relations coup during Sunday’s Super Bowl halftime extravaganza, where a fleet of 300 Intel Shooting Star drones equipped with LED displays lit up the sky behind Lady Gaga. But the drones didn’t actually fly in the show on Sunday night, the WSJ's Ted Greenwald reports. They were filmed early last week and projected on the stadium’s screens.

Prosecutors to seek indictment against former NSA contractor. Federal prosecutors plan to seek an indictment this week against a former National Security Agency accused of the biggest theft of classified information in U.S. history, the Washington Post reports. Harold T. Martin III, who was arrested in August, was part of the NSA's elite hacker unit, Tailored Access Operations. Some U.S. officials say Mr. Martin stole 75% of that unit's hacking tools.

Toshiba draws bids for chip business. While Toshiba Corp.’s memory-chip unit has the attention of SK Hynix Inc., Micron Technology Inc. and Foxconn Technology Group, people familiar with the matter see advantages to a deal with Western Digital Corp., the Journal reports. Toshiba’s collaboration on flash memory with SanDisk—now part of Western Digital—goes back to 1999 when researchers at the two companies co-wrote papers about the technology. Toshiba invented flash memory in 1984 and then a more advanced chip called NAND flash memory in 1987.

Dubai makes real its blockchain plans. A year after the government announced its intention to become a center of blockchain technology, a number of companies and banks there are working with IBM Corp. on blockchain projects, Reuters reports.

U.S. House bill requires warrants for email access. The U.S. House of Representatives voted in favor of requiring law enforcement to obtain a search warrant before seeking access for emails from tech companies. The vote is considered a win for privacy advocates but as Reuters reports, the measure is expected to meet opposition in the Senate.

Zenefits chooses new CEO. Software executive Jay Fulcher is the third person to lead the embattled health-benefits broker since early 2016, the Journal's Rolfe Winkler reports. Mr. Fulcher, a former CEO of software startup Ooyala Inc. and Agile Software Corp., will replace David Sacks, who in early December said he would step down less than a year after taking the reins from Zenefits co-founder Parker Conrad.

LEADERSHIP

WSJ

Don’t miss. The Wall Street Journal CIO Network, scheduled for Feb. 27-28 in San Francisco, will bring together chief information officers and technology officers from the world’s largest and most influential companies with the mission to identify key challenges in technology and new opportunities for innovation that will unlock value for their organizations. The speaker lineup includes Google's Diane Greene. Click here to learn more about the scheduled events.